Is electronic billing (or ebilling or e-billing) legal? Can you send or receive an electronic tax invoice? Yes, you can issue bills (invoices, credit and debit notes) electronically instead of in paper format. But there are some legal requirements that have to be met. Failure to meet the legal requirements can invalidate your bills and result in a fine or penalty. The requirements set out by SARS are reasonably straightforward and, in the most part, no different from those set out in respect of paper-based billing. Don’t make the mistake of avoiding electronically billing, due to the mistaken belief that the requirements are too hard to meet. But you must make sure you meet the legal requirements.
Electronic billing, or e-billing, is the process by which invoices and related documents (debit and credit notes) are delivered to recipients electronically, as opposed to traditional postal delivery. This is generally done via email or by allowing customers to access a webpage containing the billing data. E-billing by SMS is also growing.
What are the laws that relate to ebilling?
- The VAT404 – Guide for Vendors is the place to start.
- You must also look at VATNews 20.
- You must also take the Electronic Communications and Transactions Act (ECT Act) into account.
What are the benefits of electronic billing?
There are some significant benefits to be gained from electronic billing. For example:
- Get paid by your customer faster
- Reduce admin and paper work, saving time and money
- Improve customer retention – many customers prefer to receive electronic bills
- Retain your VAT records easier
What are the legal requirements or SARS requirements?
Essentially, there are five requirements. The sender of the bill must:
- put some information on the document,
- secure the invoice,
- get the customer’s written confirmation that they will accept the ebill,
- put “copy tax invoice” on all copies, and
- retain the electronic bill for 5 years.
How we can help you regards electronic tax invoices?
We can assist you to:
- ensure that you comply with the legal requirements,
- answer your questions about the legal requirements,
- find the right vendor or supplier of Electronic Bill Payment and Presentation (EBPP) technology solutions,
- provide you with a company policy on when you will accept electronic tax invoices,
- audit that your ebilling complies with the law,
- educate your customers as to why your ebilling technology is lawful.
We use FreshBooks for our billing.